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Three companies were forced to delist from the London Stock Exchangeâs junior market last month as nominated advisers shed small- and micro-cap clients to focus on fewer, more lucrative large-cap companies.

Ukrainian oil and gas exploration and production company Cardinal Resources was forced to delist from London’s Alternative Investment Market in November because it failed to find a replacement for Nabarro Wells, its nominated adviser or Nomad. The company said it intended to seek a listing on an alternative recognised stock exchange “at the appropriate time”.

This is part of a trend for Nomads to focus their resources on the growing number of larger companies listed on Aim that generate greater revenues through transactions and trading than the small and micro-caps that the exchange was initially created to serve.

Companies with a market capitalisation of less than £25m (€34.6m) represented 50.2% of the number of companies on Aim but only 7.6% of total equity market value, according to data from the LSE at the end of October this year.

Four years earlier companies of that size represented 75.7% of the number of exchange members and 27.5% of total market value.

Chris Owen, a partner at corporate finance company Manches, said: “The ratio of Nomad professionals to Aim companies has decreased. Nomads are very hungry for transaction costs – companies need to be doing deals not just sitting on the market as a member of the living dead.”

Nomads have faced higher costs per client due to increasing legal responsibilities since the LSE tightened Aim rules earlier this year in response to criticism of standards of corporate governance on the exchange.

The rule changes required Nomads to ensure the suitability of companies and included greater penalties for those failing to fulfil their duties.

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Tim Linacre, chairman of UK corporate broker Panmure Gordon, said: “Broking firms are not charities. The Nomad role is not profitable given the amount of time and the costs involved. The only way to make money is by working on deals for clients and trading shares.”

However, Linacre said Panmure Gordon would never walk away from a client that couldn't find a replacement Nomad.

Smaller companies are also increasingly weighing up the costs of maintaining a listing against the benefits. The cost is likely to be a minimum of £200,000 including £50,000 in Nomad fees, plus the regulatory, legal and PR costs, and salaries of non-executive directors.

The other companies that de-listed from Aim last month included digital communications company DA Group, which left the exchange about a month after Daniel Stewart resigned as its Nomad on October 12.

The board of Emerging UK Investments revealed on September 12 that Beaumont Cornish had given notice that it would cease to act as Nomad and the company de-listed on November 9.